On Tuesday, Mizuho Securities updated its outlook on EPAM Systems (NYSE:EPAM), increasing the price target to $224 from $218 while retaining an Outperform rating on the shares. The adjustment follows EPAM Systems’ announcement of robust first-quarter 2025 earnings and an improved financial forecast for the year. The company’s management has revised its organic constant currency (CC) growth projections upwards, despite ongoing macroeconomic uncertainties. This optimism is supported by data from InvestingPro, showing 12 analysts revising their earnings estimates upward, with the company’s stock surging over 18% in the past week. Currently trading at $186.60, EPAM commands a market capitalization of $10.57 billion.
EPAM Systems’ solid performance is attributed to the successful implementation of new technologies such as GenAI, which appears to be driving the company’s demand recovery. According to Mizuho’s analysis, after enduring a difficult period for IT Services spending over the past two and a half years, EPAM is now well-positioned to enhance its organic revenue growth in 2025 and 2026, with InvestingPro data indicating a projected revenue growth of 13% for FY2025. This optimistic outlook is further supported by the strategic relocation of the company’s delivery professionals, an initiative referred to as the "Great Relocation." The company maintains a strong financial position, with a "GOOD" Financial Health Score and more cash than debt on its balance sheet.
The research firm has slightly increased its revenue and earnings per share (EPS) estimates for EPAM Systems for the fiscal years 2025 and 2026. This revision is a direct result of the company’s recent performance and the raised guidance provided by its management. The new price target of $224 reflects Mizuho’s confidence in EPAM Systems’ growth trajectory and potential for continued success in the IT Services sector. According to InvestingPro analysis, EPAM appears undervalued at current levels, with additional insights available in the comprehensive Pro Research Report, which provides deep-dive analysis of this and 1,400+ other US stocks.
The analyst from Mizuho, in commenting on the decision to raise the price target, highlighted the significance of EPAM’s updated 2025 guidance. The company’s ability to raise the lower end of its organic CC guidance amidst volatile market conditions is seen as a strong indicator of its resilience and robust demand for its services.
EPAM Systems’ focus on new technologies like GenAI and its strategic adjustments to operations and workforce placement are key factors that have contributed to the favorable analysis by Mizuho. The firm’s maintained Outperform rating and heightened price target suggest a positive outlook for EPAM’s stock performance in the near future.
In other recent news, EPAM Systems reported impressive financial results for the first quarter of 2025, with earnings per share (EPS) of $2.41, surpassing the forecasted $2.29. The company also exceeded revenue expectations, bringing in $1.3 billion compared to the anticipated $1.28 billion. This performance marks a revenue growth of 11.7% year-over-year and has led EPAM to raise its full-year revenue guidance to a range of 11.5% to 14.5%. Analyst Bryan Bergin from TD Cowen responded to these results by increasing EPAM’s stock price target from $180 to $198, while maintaining a Hold rating. Bergin noted that EPAM’s first-quarter performance was solid and that the second-quarter outlook suggests continued organic growth recovery. The analyst also highlighted EPAM’s prudent approach to maintaining its second-half view amidst macroeconomic volatility. These developments reflect EPAM’s resilience and strategic focus on AI-related services and partnerships with major tech companies like Google (NASDAQ:GOOGL) Cloud and AWS.
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